After recently reporting that CEO Mindy Grossman had departed, HSN said it was looking to improve its performance after a drop in net income and sales in the first quarter.
In the first quarter, the retailer posted net income of $21.2 million, or 40 cents per diluted share, versus $28.6 million, or 54 cents per diluted share in the last first quarter. Net income adjusted for extraordinary charges was $54.1 million, or 40 cents per share, versus $65.7 million, or 54 cents per share, in the period a year earlier.
Net sales were $785.4 million versus $816.8 million in the year-prior quarter. Operating income was $38.6 million versus $49.8 million in the period a year previous.
In its main HSN business, net sales slipped 2%. Digital sales grew 3% with penetration increasing 290 basis points to 46.7%. Sales gained in apparel and accessories, kitchen and home, with those advances offset by decreases in other product categories, the company said.
HSN recently announced that Mindy Grossman had resigned as CEO effective May 24. She was named president and CEO of Weight Watchers. Until a successor is named, the board of directors has established the office of the chief executive, which consists of Rod Little, HSNi CFO, Bill Brand, chief marketing officer of HSNi and president of HSN, and Judy Schmeling, COO of HSNi and president of its Cornerstone Brands division.
“We continue to focus on stabilization and ultimately growth regeneration in the business,” Little said. “The continued strength of digital sales, and mobile sales in particular, has been very encouraging. Digital sales, which now account for over half of our revenue, continued to grow both in absolute terms and as a proportion of total revenue. Mobile, which we see as our flagship, continues to be our fastest growing sales channel and significant source of new customer acquisition.”
He added that HSN remains “committed to our strategies to improve our performance. Our key priorities are acquiring and retaining customers via a robust and relevant product portfolio, optimizing our digital platforms, and improving our supply chain capabilities and efficiency, all to drive consistent shareholder value creation. As we look to celebrate our 40th anniversary this summer, we thank Mindy Grossman for her vision, inspiration and leadership over the past decade.”